Rick Santorum

Mr. SANTORUM

Mr. SANTORUM. So there is no intermediary. The plan is actually run-- unlike the current Medicare plan, it is going to be run by the Federal Government without an intermediary?

Mr. SANTORUM. Take a look at this letter. It is very clear that the reason these plans left was that we set the growth rate for Medicare HMOs at one-fifth the growth rate of the traditional Medicare Program, and obviously they couldn't continue because health care costs continued to go up. Remember, they were the only ones providing prescription drugs. So while Medicare was going up 10 percent without prescription drugs, HMOs were going up probably 10 percent or more because they were offering prescription drugs. So they said: We just can't continue, under this artificial ceiling, to continue. What we are trying to do with this plan is to put that choice back to seniors.

Mr. SANTORUM. If the Senator will yield further, I would also ask the Senator if he knows that Medicare+Choice is not available in most communities because they are only available in most urbanized areas.

Mr. SANTORUM. I am happy to.

Mr. SANTORUM. Madam President, another concern I have--and it is not a concern with the bill; it is just the marketing of the bill--is to suggest that their plan will move forward immediately. One of the comments made was that the plan before us does not take effect until 2006, and their plan will take place as soon as possible. Let me just suggest, we went to CMS, which is the organization within the Government that runs Medicare, and other experts in the field and asked: When is the soonest possible we can have this drug benefit in place? And they said: It would not be prudent to do so before 2006, to promise before 2006, because it is rather complicated to put together. So the reason we put in 2006 is we want a backstop. The Durbin amendment has no backstop. It just says: As soon as possible. Who knows how long that will be? We have a backstop, focusing on getting this ready for 2006, which I think is actually beneficial, and, at the same time, it does not rush the process that potentially could do something that would be imprudent and, potentially, ineffective in moving forward a plan. So I think 2006, given all the expertise we have in this town as to what would be the proper timeframe, is the right answer. It is a good balance between making sure there is a date certain and that it is fairly quick and, at the same time, not too quick as to cause problems. The other thing we do--and this is not mentioned in the marketing of the MediSAVE amendment--we have a plan that does go into effect immediately, unlike the Durbin amendment, which will probably be years--at least a year or 2--before it goes into effect. And there would be no coverage for anybody under that amendment. We will have coverage immediately, starting within a few months, according to CMS, again, the agency that runs Medicare. They anticipate, with the drug card--which accomplishes much of what the Senator from Illinois has suggested they want to accomplish, which is to get a group discount or volume discount through the Federal Government--we will do that immediately, not in a year or 2 years or 3 years or however long the Durbin amendment would take, but it will do it immediately. Within a couple of months, we will have out to every Medicare- eligible beneficiary a discount card that can replace all the other discount cards that a lot of seniors already have. It will be a single discount card that will give a discount nationally where we will be able to negotiate with a variety of different pharmaceutical companies. So it is an opportunity for us to use the volume discount to be able to reduce drug costs for seniors. In addition to that, if you are lower income, you will receive up to $600 in money to help defray the cost of your prescriptions--not 2 years from now, not 3 years from now, but immediately--really, a few months from now, hopefully as soon as the first of the year, or maybe even sooner than the first of the year. So it really does accomplish a lot of what the Durbin amendment attempts to do. By the way, once we move into the full-blown plan in 2006, you are going to be contracting under the stand-alone benefit which goes with the traditional fee-for-service Medicare system as well as Medicare Advantage, which is the PPO and HMO options that will be available to seniors--none of that will be available, by the way, under the Durbin amendment--but what we will do is provide the opportunity for them to negotiate these discounts with pharmaceutical companies because they will be bidding in large regions, multi-State regions, with lots of people, lots of scrips that will be filled. So they will be able to use their purchasing power to get a lot of these volume discounts. Now, will they be as big as the Federal Government? No. But when you are looking at these kinds of volumes, there is only so much volume discount you can get. At some level you don't get any more discount. It sort of caps out. We think the prescription business will be big enough that they will get substantial discounts and accomplish exactly what the Senator from Illinois hopes to accomplish in his legislation. It looks like the Senator from Illinois is ready to go, so I reserve the remainder of our time.

Mr. SANTORUM

Mr. SANTORUM. Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate, on Wednesday, June 25 at 10:00 a.m. to consider pending calendar business. On Wednesday, June 25, at 10:00 a.m., the Committee will hold a Business Meeting in Room SD-366 to consider the following items on the Agenda: Agenda Item #3: S. 470--A bill to extend the authority for the construction of a memorial to Martin Luther King, Jr. Agenda Item #4: S. 490--A bill to direct the Secretary of Agriculture to convey certain land in the Lake Tahoe Basin Management Unit, Nevada, to the Secretary of the Interior, in trust for the Washoe Indian Tribe of Nevada and California. Agenda Item #6: S. 546--A bill to provide for the protection of paleontological resources on Federal lands, and for other purposes. Agenda Item #7: S. 643--A bill to authorize the Secretary of the Interior, in cooperation with the University of New Mexico, to construct and occupy a portion of the Hibben Center for Archaeological Research at the University of New Mexico. Agenda Item #8: S. 651--A bill to amend the National Trails System Act to clarify Federal authority relating to land acquisition from willing sellers for the majority of the trails in the System, and for other purposes. Agenda Item #9: S. 677--A bill to revise the boundary of the Black Canyon of the Gunnison National Park and Gunnison Gorge National Conservation Area in the State of Colorado, and for other purposes. Agenda Item #10: S. 924--A bill to authorize the exchange of lands between an Alaska Native Village Corporation and the Department of the Interior, and for other purposes. Agenda Item #13: S. 1076--A bill to authorize construction of an education center at or near the Vietnam Veterans Memorial. Agenda Item #14: H.R. 255--To authorize the Secretary of the Interior to grant an easement to facilitate access to the Lewis and Clark Interpretative Center in Nebraska City, Nebraska. Agenda Item #15: H.R. 1577--To designate the visitor center in Organ Pipe National Monument in Arizona as the ``Kris Eggle Visitor Center'', and for other purposes. In addition, the Committee may turn to any other measures that are ready for consideration.

Mr. SANTORUM. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Wednesday, June 25, 2003 at 2:00 p.m. to hold a hearing on Constitutionalism, Human Rights and the Rule of Law in the Nation of Iraq.

Mr. SANTORUM. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a hearing on ``Department of Justice and Judicial Nominations'' on Wednesday, June 25, 2003, at 2:00 p.m. in the Dirksen Senate Office Building Room 215 [Finance Committee Hearing Room]. Revised Tentative Agenda Panel I: Senators. Panel II: Allyson K. Duncan to be United States Circuit Judge for the Fourth Circuit. Panel III: Robert C. Brack to be United States District Judge for the District of New Mexico; Samuel Der-Yeghiayan to be United States District Judge for the Northern District of Illinois; Louise W. Flanagan to be United States District Judge for the Eastern District of North Carolina; Lonny R. Suko to be United States District Judge for the Eastern District of Washington; and Earl Leroy Yeakel III to be United States District Judge for the Western District of Texas. Panel IV: Karen P. Tandy to be Administrator of the Drug Enforcement Administration, United States Department of Justice; and Christopher A. Wray to be Assistant Attorney General for the Criminal Division, United States Department of Justice. THE PRESIDING OFFICER. Without objection, it is so ordered. subcommittee on the constitution, civil rights, and property rights subcommittee on near eastern and south Asian affairs

Mr. SANTORUM

Mr. SANTORUM. Mr. President, I move to table the amendment and ask for the yeas and nays.

Mr. SANTORUM. Mr. President, I rise in opposition to make four points. First, we had an additional $30 billion when this bill was originally marked up in the Finance Committee. We put all $30 billion into filling the donut, so we have done as much as we can with the money allocated. Second, this amendment costs $64 billion. We would bust the agreement, which is to stay within the budget of $400 billion. Third, according to CMS, only 2 to 12 percent--depending on your estimates--are going to be affected by this ``coverage gap.'' Finally, there is no standard benefit. This is sort of a mystery I don't know why we don't talk about more. This is a typical design of what a benefit would look like. But under this bill, the companies bidding on these pharmaceutical contracts can design the benefit any way they want. They can have a donut. They do not have to have a donut. The only thing they are required to do is have a $275 deductible for those plans of 160 percent of poverty and above and have $3,700 in total spending before the catastrophic kicks in. The donut is illusory, and I ask my colleagues to vote no on the amendment.

Mr. SANTORUM. Mr. President, I oppose the amendment. First off, it is bad enough to have one fallback, which I believe will dramatically discourage private plans from participating in a stand-alone drug benefit. To have two is even worse. The fact is, the Secretary has the authority under this legislation to balance the risk. With a fallback plan, there is no risk on the private sector. All the risk for a plan is on the public sector. We give the Secretary the ability to dial back the risk to everything but zero, and the fallback plan is zero. We believe giving the Secretary the discretion will at least encourage the private sector to come in, which they will under this bill, and take some risk, which means they will have some incentive to control costs. If they have no risk, they have no incentive and, thereby, the cost of the program goes up. Having one fallback plan is a very bad idea. Expanding this very bad idea is a worse idea, and I hope we vote against the amendment. I ask unanimous consent that the remaining two votes in this series be limited to 10 minutes each.

Mr. SANTORUM. I move to table the amendment and I ask for the yeas and nays.

Mr. SANTORUM. Mr. President, I hope my colleagues can hear me. What the Pryor amendment does has nothing to do with reimportation. What it says is, if the Secretary does not certify that the drugs are safe coming from Canada after 2 years, we will adopt the Canadian pricing scheme for pharmaceutical products in this country. So the Government of Canada will set prices for pharmaceutical drugs in this country. We will be ceding to the Government of Canada the right to set prices for drugs in the United States of America. If we want to have price controls for drugs, we should have a debate to do that, but we should not be ceding to a foreign government the right to set drug prices in this country, and that is what this amendment does. Whether you are for reimportation, whether you are for price controls for drugs, do not give up the right to set the price controls to a foreign government who will set them for the United States. And that is what this amendment does. I urge an overwhelming negative vote.

Mr. SANTORUM. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. SANTORUM. Mr. President, I ask unanimous consent that the remaining two votes in this series be limited to 10 minutes each.

Mr. SANTORUM. Mr. President, I move to table the amendment and ask for the yeas and nays.

Mr. SANTORUM

Mr. SANTORUM. Mr. President, I ask unanimous consent that we have 8 minutes equally divided, starting at 10:52.

Mr. SANTORUM. I say to the Senator, let me know, if there is maybe 8 minutes equally divided, would you have time to do that?

Mr. SANTORUM. Mr. President, I hear often from many on the other side of the aisle that the Republican Party is the party of big corporations and corporate bailouts: This is a $66 billion, big corporation bailout being offered by Members on the other side of the aisle, $66 billion to corporate America that is already getting a huge benefit under this bill. We are already, by providing prescription drugs to all retirees, giving them the ability to basically back away, as has been discussed, from providing basic prescription drugs and still add on, if they want to add on additional benefits to the bottom line benefit. The cost savings already in the bill to corporations are in the billions and billions of dollars. But that is not enough. We have to give big corporate America another $66 billion so they can provide even more generous benefits to their retirees on top of the generous benefit we have in this legislation. I find it almost incomprehensible that we are arguing that at a time when we are providing literally tens of billions of dollars--maybe even more than that--to corporate America to help relieve some of their retiree health care costs, now we have to add $66 billion more over the next 10 years to corporate America. This is a very unwise amendment. It is a very costly amendment, $66 billion. In addition, you are seeing already that corporate America is getting out of the retiree health care business because it is very expensive. One of the reasons we are moving forward with this legislation is because of that. We have seen the percentage of retiree health plans drop from 71 percent to 44 percent just in the last 15 years. This is a trend that is ongoing. One of the reasons we are stepping in with this universal benefit is to address that issue. To in effect provide an additional amount of money to corporations to basically help them maintain their effort in this area is a folly. It is a very costly proposal and should be, hopefully, defeated. I reserve the remainder of my time.

Mr. SANTORUM. Mr. President, will the Senator from North Dakota yield for a unanimous consent request?

Mr. SANTORUM. Mr. President, the managers of the bill have asked we enter a unanimous consent agreement that the time between 10:50 and 11 o'clock be equally divided on the Rockefeller amendment.

Mr. SANTORUM. Mr. President, under the existing legislation, employers are allowed to continue to offer benefits to their employees. Many will. Many will change the structure of the benefit in which they offer to wrap around the existing Medicare benefit, as they do now with Medicare. Their retiree insurance plans currently wrap around the existing Medicare plan. Future retiree plans will wrap around. Giving corporations $66 billion over the next 10 years as an incentive to give more generous benefits is nothing but a corporate giveaway and costs the taxpayers literally billions of dollars. It is an unwise transfer of Government dollars, taxpayer dollars to big corporations, that already have very generous health care plans, as well as retirement plans. It is not focused on what we should be focusing on here, which is the poorest of the poor. Mr. President, I move to table the amendment and ask for the yeas and nays.

Mr. SANTORUM

Mr. SANTORUM. Mr. President, I rise in opposition to the Pryor amendment which I understand was debated just a few minutes ago. I do so in strongest terms. We had a debate last week on the issue of reimportation of drugs from Canada. The Senate spoke and said that if the Secretary of Health and Human Services would declare that such reimportation was safe, we could then bring these drugs across the border at a reimported price. Many on this side of the aisle, and I am sure a few on the other side of the aisle, voted for that amendment, as amended, by Senator Cochran for that safety measure basically concluding that the Health and Human Services Secretary would never determine that these drugs would be considered safe, since the Canadian Government itself said they could not guarantee they were safe. We have all sorts of problems today with counterfeit drugs, drugs getting shipped in from other countries, leading to a variety of health problems. There was a great amount of comfort. The Pryor amendment goes one step further, according to my understanding, saying if the Secretary does not say the drugs are safe within a period of time--I believe it is 2 years--then prices of drugs in this country will be set by the Canadian Government, which I find a startling concession of authority of this Government to a foreign country; that we are going to have a foreign country and a board in a foreign country set prices for drugs in the United States of America. It is a remarkable concession for the Senate. I know we have a great desire to control many things in the United States. We would like to set prices, I am sure, on lots of different items. We do it in the Agriculture bill all the time. Now we are going one step further. If you cannot win price controls by having the Senate pass a price control bill, delegate the Canadian Government to control the prices for you. Maybe we should choose different countries. Why Canada? Maybe there are other countries that set even lower prices than Canada. I suspect there are countries that would set lower prices than Canada. Why not choose them if we really want to save consumers money? If this amendment is adopted, I would probably offer amendments that we should have chicken prices set by the Canadian Government, wheat prices set by the Canadian Government, and lumber and timber prices set by the Canadian Government. Maybe it would just be good to have the Canadian Government set all our prices in this country for those items we think are important. Obviously, they are very thoughtful in Canada, and they know what is best for us here, and we should just go ahead and let them set our prices for us. We are not talking about the Canadian marketplace setting prices. We are talking about the Canadian Government. Let me explain how the Canadian Government operates. The Canadian Government operates as follows: You want to sell your drug in Canada? Fine, you have to get it approved, get it on the formulary. By the way, you have no other place to sell drugs other than drugs approved by the Canadian Government. Remember, they have a Government- run health care system up there. My understanding is that the Canadian Government actually sets their own drug prices. I do not think they go to another country to get drug prices set and use those. I think they set their own. Assuming they are setting their own drug prices, what they do is say to the drug company, take Pfizer: OK, you want to sell your drug here? Great. We will pay you $1 a pill. Pfizer says: This costs us $1 billion to research. It is a great drug. It solves all sorts of problems. We sell it in America for $10 because of the enormous cost of the research and testing to make sure it is safe and efficacious, and it cost us a lot of money, and we only have a short patent by which to recoup the investment dollars. We have a lot of drugs we tested along the way to find a cure for this problem, and we have to recoup those costs; otherwise, we cannot stay in business, we cannot continue to research. The Canadian Government says: That is nice; a dollar. Pfizer says: No, we can't sell it for a dollar. The Canadian Government says: Fine, you can't sell your drug here. So Pfizer loses out on a market of 16 million people--I do not know how many people are in Canada--16 million people, something like that. Pfizer says: No, we won't sell. Or what they say is: You know what. It only costs us 50 cents to make this pill. Yes, we are not going to make any money on it, but this is a drug that is an important drug so we will make it available in Canada for a dollar. The other alternative is they just say, no, we are not going to sell it in Canada. Under Canadian law, the Canadian Government has the right to steal Pfizer's patent, issue that patent, that formulary or formula, whatever the drug is, to a generic drug manufacturer in Canada for them to produce at the dollar price that Canada is willing to pay for it. So they can steal a patent that a company in this country spent millions of dollars, potentially a billion dollars, to come up with and set a price in Canada at the level they so choose. The Senator from Arkansas wants to condone that behavior and say we have to charge the same price in this country. I cannot imagine anything that would be more damaging to an industry that does more than any industry in America to solve our health problems. They spend more on research and development than any group of companies that exist, and they bring through drug after drug and therapy after therapy to extend lives, to increase the quality of life, and to cure diseases. So the reward in the Senate is that we are going to have a foreign government set prices for an industry that does not exist in Canada but it does exist in the United States. The majority of the new drugs in the world are researched and developed in the United States. Yes, we do pay more for drugs in this country. I will concede that to the Senator from Arkansas. We pay more for drugs here, and the reason we pay more for drugs here is that we do not regulate prices, as most other countries around the world do. I think the Senator from Arkansas is on to something. We need to do something about those prices around the world, but it is not to adopt them in this country; it is to get the trade administrator to start putting these issues on the table when it comes to negotiating free trade deals. They have to put on the table the pirating of our patents, with our free trade partners such as Canada and Mexico. They have to put on the table the prices they pay for drugs that are researched in this country that our people in this country subsidize. Yes, we do. In fact, we subsidize the world's research in pharmaceuticals, admitted. So the Senator from Arkansas says we are going to stop doing that. We are going to do what Canada does, which is not subsidize one nickel of the cost of researching these new drugs--what Germany does, what England does, what most of the developed world does. Yes, they piggyback on America, and so the Senator from Arkansas is saying let's just piggyback on Canada. Well, what are the consequences? I do not think it takes an expert in pharmaceuticals to figure out exactly what happens. We will squeeze the research dollars out of the drugmaking industry because we will be reimbursing them based on their cost of manufacturing. So the dollars for research to attract investment dollars to spend on research and development for that next generation of drugs will be gone. Maybe that is a good idea. Maybe it is more important to have people get their drugs inexpensively today than to find that cure for cancer, diabetes, or Parkinson's, or develop a new drug to ease symptoms of HIV. Maybe it is more important for someone to have their drugs a little cheaper today. But there are millions of Americans, and there are even more millions of people around the world, waiting for that little pill that is yet to be discovered that will extend their life so they can see their daughter or grandchild being born, waiting for someone to cure that disease they are saddled with today, to give them just a few more months or a few more years, and we will say to them, anyone who votes for this amendment, when that person walks in their office and says, I am here for NIH research dollars for diabetes, or, I am here for NIH research dollars for AIDS, Parkinson's, cancer, or heart disease, I want that Senator to say to them, I voted for this amendment and, yes, we are going to have lots of research dollars, but no one is going to take that research and do much with it because we have just squeezed every dollar we can for research and development out of the pharmaceutical industry, which would take that research and do something with it to put it to commercial practice and make that drug available. We will say to them that even though we are passing a prescription drug benefit that is going to extend pharmaceutical benefits to make drugs less expensive, that was not good enough. No, it was not good enough to cover people's drug benefits. We have to take a bite out of the hide of those nasty pharmaceutical companies that get beaten up with frequency, I understand. They get beaten up a lot, until they are needed, until they extend your wife's life or they save your child's life; then the rhetoric tones down quite a bit. We are shooting with real bullets. This is a Medicare pharmaceutical package that will pass and turn into law, and anybody who thinks this is a free vote, that we can go back home and campaign and say, gee, I am going to get you cheap drugs, understand what this vote means. When that 7-year-old diabetic walks in your office, understand what you have done. It is as real as denying them the cure that is sure to come. I know this is not a popular issue, to stand up for pharmaceutical companies. Maybe we should do to them what we have done to a lot of industries that have been successful in America: Beat them up, tax them, take their profits away, until they become dependent upon us, and then we will give them loan guarantees and bail them out. Then it will be a really popular thing because they will be losing money and we will have to help them. I think that is a very bad approach. The right approach is to provide coverage for those who are in need of insurance to help them with their prescription drug bills while at the same time allowing one of the most vibrant industries we have in this country to survive and thrive. That is the balanced approach. It is not attacking the very organizations, the companies, that are providing lifesaving drugs for millions of Americans and millions around the world.

Mr. SANTORUM. I am happy to yield for a question.

Mr. SANTORUM. Mr. President, do I have time remaining?